AUSTIN, Texas, March 10 /PRNewswire-FirstCall/ -- Citizens, Inc. (NYSE: CIA) reported net income of $17.3 million or $0.31 basic and diluted earnings per share of Class A common stock for the year ended December 31, 2009 compared to a net loss of $15.7 million or $0.42 basic and diluted losses per share of Class A common stock for the year ended December 31, 2008. The increase in earnings primarily resulted from realized gains of $8.0 million for the year ended December 31, 2009 compared to a realized loss of $23.8 million for the year ended December 31, 2008, as well as the change in fair value of the Company's warrants resulting in a gain of $3.2 million at December 31, 2009 compared to a loss of $2.7 million at 2008.
Premium income totaled $40.8 million and $39.4 million for the three months ended December 31, 2009 and 2008 and $147.3 million and $141.3 million for the years ended December 31, 2009 and 2008, respectively. The increase in premium revenue also related to higher renewal premiums in the Life Insurance segment, which increased 6.8% from $84.0 million up to $89.7 million for the years ended December 31, 2008 and 2009. Despite the increased premium income, the Company experienced lower new policy sales in 2009 as our international Life Insurance segment business slowed compared to 2008 levels. The Home Service premium revenue grew 5.1% to $41.3 million in 2009 compared to $39.3 million in 2008. A full year of premiums related to Ozark National Life Insurance Company ("ONLIC") were included in 2009 totaling $3.9 million, which was purchased in the fourth quarter of 2008.
Net investment income declined in 2009, with $7.9 million and $8.0 million reported for the three months ended December 31, 2009 and 2008 and $29.6 million and $30.5 million for the years ended 2009 and 2008, respectively. Net investment income declined, despite the growth in the investment portfolio from $569.3 million to $671.3 million as of December 31, 2008 and 2009. The investment yield on fixed maturity and equity securities, which comprises approximately 93.2% of total invested assets, was adversely impacted by the historically low interest rates. In addition, the Company experienced significant call activity, primarily in the Life Insurance segment portfolio, which resulted in funds reinvested into lower yielding securities.
The Company recognized gains of $5.2 million compared to losses of $23.6 million for the three months ended December 31, 2009 and 2008 and gains of $8.0 million and losses of $23.8 million for the years ended December 31, 2009 and 2008, respectively. The gains in the current year resulted from sales opportunities created by market recovery of fixed maturity and equity securities as contrasted to the significant other-than-temporary impairment losses recorded in 2008 on equity mutual fund investments. Additional other-than-temporary impairments of $0.3 million were recorded in 2009, due to the continued decline in fair values on acquired securities related to the ONLIC acquisition. These losses are netted with the reported gains.
The Company reported higher surrender expense in 2009 compared to 2008, with $5.5 million and $4.4 million for the three months and $19.7 million and $15.2 million for the years ended December 31, 2009 and 2008, respectively. The surrender activity is most notably related to older policies that are beyond the surrender charge period and consequently reflect the maturing nature of the international Life Insurance segment business.
Assets increased 11.4% to $927.3 million at December 31, 2009, compared to $832.3 million at December 31, 2008, due primarily to growth in the Company's investment portfolio. Investments increased to $671.3 million at December 31, 2009 from $569.3 million at December 31, 2008, due to continued strong cash flows from operations that have been invested predominately in fixed maturities, and the higher valuation of the Company's investment portfolio due to the improved economic conditions, as well as the inclusion of recently acquired Integrity Capital and ONLIC.
Stockholders' equity increased to $216.1 million at December 31, 2009, from $171.5 million at December 31, 2008, largely due to income earned during the year and the market improvement related to securities in the available-for-sale portfolio as well as the conversion of the Company's preferred stock into common equity.
Citizens, Inc. will host a conference call to discuss its 2009 year-end operating results at 10:00 a.m. Central Standard Time on Thursday, March 11, 2010, hosted by Rick D. Riley, Vice Chairman and President, Kay Osbourn, Chief Financial Officer and other members of the Citizens, Inc. management team. To participate, please dial (888) 742-8686 and when prompted enter confirmation code #8442219. It is recommended you dial in 3 to 5 minutes before the call is scheduled to begin. A recording of the conference call will be available on Citizens' website at www.citizensinc.com in the Investor Information section under News Release & Publications, following the call.
About Citizens, Inc.
Citizens, Inc. is a financial services company listed on the New York Stock Exchange under the symbol CIA. The Company expects to achieve its goal, established nearly a decade ago, to reach $1 billion in assets by the end of 2010, via the worldwide sale of U.S. Dollar-denominated whole life cash value insurance policies, coupled with the acquisition of other life insurance companies. Citizens' Class A common stock closed at $7.04 on March 10, 2010.
Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "may," "will," "expect," "anticipate," "continue" or comparable words. In addition, all statements other than statements of historical facts that address activities that the Company expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of the Company, particularly its Form 10-K for the fiscal year ended December 31, 2008, its quarterly reports on Form 10-Q and its current reports on Form 8-K, for the meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in the Company's expectations. The Company also disclaims any duty to comment upon or correct information that may be contained in reports published by the investment community.
For further information contact: |
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Joshua G. Arnold |
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Vice President, Investor Relations |
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(512) 837-7100 |
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CITIZENS, INC.
COMPARATIVE CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
OPERATING STATEMENTS
Years ended Three-Months ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues
Premium income $147,280 141,297 40,786 39,382
Net investment income 29,602 30,478 7,869 7,991
Realized gains (losses),
net 8,040 (23,812) 5,213 (23,602)
Decrease (increase)
in fair value of
warrants 3,154 (2,662) 73 (988)
Other income 904 1,372 108 520
--- ----- --- ---
Total revenues 188,980 146,673 54,049 23,303
------- ------- ------ ------
Benefits and Expenses
Insurance benefits
paid or provided:
Claims and surrenders 59,988 56,253 15,734 14,590
Increase in future
policy benefit
reserves 40,790 37,117 12,769 12,173
Policyholders'
dividends 6,680 6,865 1,938 2,275
----- ----- ----- -----
Total insurance
benefits paid or
provided 107,458 100,235 30,441 29,038
Commissions 35,536 35,984 10,074 10,078
Other underwriting,
acquisition and
insurance expenses 28,340 28,611 6,451 7,368
Capitalization
of deferred policy
acquisition costs (23,656) (24,109) (7,399) (7,233)
Amortization of
deferred policy
acquisition costs 17,202 15,650 5,487 4,121
Amortization of cost
of customer
relationships
acquired and other
intangibles 3,494 2,897 864 742
----- ----- --- ---
Total benefits
and expenses 168,374 159,268 45,918 44,114
------- ------- ------ ------
Income (loss) before
Federal income tax 20,606 (12,595) 8,131 (20,811)
Federal income tax
expense (benefit) 3,266 3,112 504 (191)
----- ----- --- ----
Net income (loss) $17,340 (15,707) 7,627 (20,620)
======= ======= ===== =======
Net income (loss)
applicable to common
stockholders $14,835 (18,263) 7,627 (21,375)
======= ======= ===== =======
Basic and diluted earnings
(loss) per share of
Class A common stock $0.31 (0.42) 0.16 (0.48)
===== ===== ==== =====
Basic and diluted
earnings (loss) per
share of Class B common
stock $0.15 (0.21) 0.08 (0.24)
===== ===== ==== =====
Weighted average shares
of Class A common stock
outstanding -basic and
diluted 47,554 43,365 48,687 44,094
====== ====== ====== ======
Book value per share $4.35 3.68
===== ====
CITIZENS, INC.
COMPARATIVE CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
BALANCE SHEET
Years ended
December 31,
------------
Assets 2009 2008
---- ----
Investments:
Fixed maturities available-for-
sale, at fair value
(cost: $389,195 and $494,034 in
2009 and 2008, respectively) $385,579 485,155
Fixed maturities held to maturity,
at amortized cost
(fair value: $199,676 in 2009) 206,909 -
Equity securities available-for-
sale, at fair value
(cost: $25,899 and $42,908 in 2009
and 2008, respectively) 33,477 43,000
Mortgage loans on real estate 1,533 339
Policy loans 32,096 28,955
Real estate held for sale 2,825 4,156
Real estate held for investment
(less $374 and $283 accumulated
depreciation in 2009 and 2008,
respectively) 6,305 4,717
Other long-term investments 86 680
Short-term investments 2,510 2,250
----- -----
Total investments 671,320 569,252
Cash and cash equivalents 48,625 63,792
Accrued investment income 7,455 7,423
Reinsurance recoverable 11,587 13,241
Deferred policy acquisition costs 115,570 109,114
Cost of customer relationships
acquired 34,728 33,805
Goodwill 17,160 15,687
Other intangible assets 1,046 1,073
Federal income tax receivable 4,023 2,090
Property and equipment, net 6,018 6,466
Due premiums, net (less $1,644 and
$2,217 allowance for doubtful
accounts in 2009 and 2008) 8,960 8,958
Other assets 834 1,375
--- -----
Total assets $927,326 832,276
======== =======
(Continued)
CITIZENS, INC.
COMPARATIVE CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
BALANCE SHEET, continued
Years ended
December 31,
------------
Liabilities and Stockholders’ Equity 2009 2008
---- ----
Liabilities:
Future policy benefit reserves:
Life insurance $592,358 $547,621
Annuities 37,882 34,025
Accident and health 6,399 7,442
Dividend accumulations 5,621 4,795
Premiums paid in advance 20,373 18,566
Policy claims payable 10,222 9,318
Other policyholders’ funds 8,105 7,929
----- -----
Total policy liabilities 680,960 629,696
Commissions payable 2,434 2,350
Deferred federal and state income taxes 8,052 3,951
Payable for securities in process of
settlement 6,000 -
Warrants outstanding 1,819 4,973
Other liabilities 11,986 12,052
------ ------
Total liabilities 711,251 653,022
------- -------
Commitments and contingencies
(Notes 5 and 8)
Cumulative convertible preferred
stock – Series A
(Series A-1 - $1,000 stated value per
share, 6,250 shares issued,
authorized and outstanding in 2008;
Series A-2 - $935 stated value per
share, 5,000 shares authorized,
4,014 shares issued and outstanding
in 2008) - 7,713
--- -----
Stockholders’ equity:
Common stock:
Class A, no par value, 100,000,000
shares authorized, 51,822,497 shares
issued in 2009 and 48,781,753
shares issued in 2008, including
shares in treasury of 3,135,738 in
2009 and 2008 256,703 240,511
Class B, no par value, 2,000,000
shares authorized, 1,001,714 shares
issued and outstanding in 2009 and
2008 3,184 3,184
Retained deficit (38,092) (55,432)
Accumulated other comprehensive
income (loss):
Unrealized gains (losses) on
securities, net of tax 5,291 (5,711)
----- ------
227,086 182,552
Treasury stock, at cost (11,011) (11,011)
------- -------
Total stockholders’ equity 216,075 171,541
------- -------
Total liabilities and stockholders’
equity $927,326 832,276
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SOURCE Citizens, Inc.
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